WTO Strikes Down China Tariff On US Steel

A worker checks on coils of steel at a factory in Dalian, Liaoning province October 18, 2012.

Photo: Reuters

The World Trade Organization forbade China Thursday to impose duties on certain U.S. steel exports.

The case involved duties imposed by China on "grain-oriented electrical steel," which is used in the cores of high-efficiency transformers, electric motors and generators, Reuters reports. The steel is made by AK Steel Corp of Ohio and ATI Allegheny Ludlum of Pennsylvania – both key states in the election.

Trade conflicts with China have been an issue in the campaign.

"Today we are again plainly stating that we will continue to take every step necessary to ensure that China plays by the rules and does not unfairly restrict exports of U.S. products," U.S. Trade Representative Ron Kirk said.

China’s duties had choked off nearly all U.S. exports of that type of steel as they fell from $270 million in 2008 to less than $3 million last year, Kirk told The Hill.

China's Ministry of Commerce had no immediate comment on the ruling from the WTO panel in Geneva, which arrived late in the evening in Beijing, Reuters said.

When the Obama administration filed the case, the volume of specialty steel trade with China was in the range of $250 million. That’s peanuts compared with the auto and auto-parts trade at issue in the latest WTO case Washington filed against China in September. The volume of auto parts trade alone amounted to about $12 billion in 2011, according to the Alliance for American Manufacturing.

The United States brought the steel case in September 2010 after China accused U.S. exporters of dumping on the Chinese market and levied punitive duties on the imports.

The tariffs, which AK Steel said amounted to about 19.5 percent on its products, affected hundreds of millions of dollars' worth of the electrical steel.

China imposed the duties after its state-owned steel firms Baosteel Group and Wuhan Iron and Steel Group complained about imports from the United States and Russia.

The Chinese objected to the "Buy America" provisions of the American Recovery and Reinvestment Act of 2009 and state government procurement laws.

On Thursday, the WTO appeals judges upheld the original ruling published in June and rejected with China's claims that the panel of adjudicators who judged the case then had misinterpreted the WTO rules.

Grain-oriented flat-rolled electrical steel is used in the production of high-efficiency transformers, electric motors and generators, the Voice of America reports.

Scott Paul, executive director of the Alliance for American Manufacturing, told The Hill he is certain that the WTO will also rule against China for its attempted retaliation against American auto and poultry producers.

"The lesson is clear: asserting our rights to trade enforcement is effective, and the U.S. will win these cases," he said. "We need to continue to stand up for American workers and businesses and challenge the unfair trade practices of China and other nations."